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Do Exposure Suits Produce a "Race to File"? An Economic Analysis of a Tort for Risk

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  • Thomas J. Miceli

    (University of Connecticut)

  • Kathleen Segerson

    (University of Connecticut)

Abstract

Conventional tort law does not allow exposure victims to seek compensation until they develop symptoms of illness. Because this may bar recovery if the injurer is judgment proof, some have advocated allowing victims to sue at exposure. However, critics charge that such a tort for risk would create a "race to file". We show that a race may or may not occur in equilibrium, and that when it does occur, not all victims choose to file even if bankruptcy is an inevitable result. We examine the consequences of the possible equilibria on compensation of victims, litigation costs, and injurer care.

Suggested Citation

  • Thomas J. Miceli & Kathleen Segerson, 2004. "Do Exposure Suits Produce a "Race to File"? An Economic Analysis of a Tort for Risk," Working papers 2004-25, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2004-25
    Note: We thank Patrick Gonzalez, Raymond Deneckere (editor), two referees, participants at the annual American Law and Economics Association Meetings, Harvard Univ., May 2002, the CIRANO-IDEI-LEERNA Conference on Regulation, Liability, and the Management of Major Industrial/Environmental Risks, Toulouse, France, June 2003, and colleagues at the University of Connecticut for useful comments on earlier versions of this paper.
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    References listed on IDEAS

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    1. T. Randolph Beard, 1990. "Bankruptcy and Care Choice," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 626-634, Winter.
    2. Thomas J. Miceli & Kathleen Segerson, 2004. "A Tort for Risk and Endogenous Bankruptcy," Working papers 2004-24, University of Connecticut, Department of Economics.
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    6. Bruce A. Larson, 1996. "Environmental Policy Based on Strict Liability: Implications of Uncertainty and Bankruptcy," Land Economics, University of Wisconsin Press, vol. 72(1), pages 33-42.
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    8. Kathryn E. Spier, 2002. "Settlement with Multiple Plaintiffs: The Role of Insolvency," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 18(2), pages 295-323, October.
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    Cited by:

    1. Michelle J. White, 2006. "Asbestos Litigation: Procedural Innovations and Forum Shopping," The Journal of Legal Studies, University of Chicago Press, vol. 35(2), pages 365-398, June.

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    More about this item

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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